Sensex opened the
week at 32377, made a high of 32396, low of 31128 and
closed the week at 31213. Thus the
Sensex closed the week with loss of 1112 points. At the same time the Nifty
opened the week at 10099, made a high of 10119 low of 9710 and
closed the week at 9737. Thus the
Nifty closed the week with loss of 356 points.
Continuing tension between the US and North Korea weighed down Indian equity
markets as the benchmarks closed more than 1 per cent lower on friday.This is
the fifth straight session of declines for the Indian benchmarks, making it the
worst weekly performance since February 2016. During the week, the Sensex fell
a little over 5 per cent.

MUCH AWAITED ‘CORRECTION’ BEGINS

‘Correction’ is one of the most
interesting aspects of market behaviour. when the market moves up considerably;
and it actually sets in, then we pray for its end. The truth remains that for
any rally to sustain and head higher, it has to undergo a Correction which not
only makes it stronger but also ready for higher targets. After grappling with
the target zone of Nifty 10100-10400 for almost two weeks, Correction has set
in and we are now looking at the Correction levels for this entire Upward Rally
which begun from Nifty 9600-9000. In the
process, the short term and medium term Trend has turned bearish and hence we
can expect selling pressure on every rise.

TREND TURNS BEARISH.

A On the daily charts, Nifty has
formed a Doji which is a bullish reversal pattern but requiring confirmation.On
the weekly charts, Nifty have formed a Opening Black body Marubuzo which has
engulfed previous four weeks bullish candles. Thus more than daily, weekly
candlestick pattern suggests strong bearishness in the near term.As long as the NIFTY trades above the level of 9900, the
outlook for the session will remain bullish. Traders with a short-term
perspective can sell on rise with a stop-loss at 9950 levels. Nifty can
continue its up move on a strong rally beyond its immediate resistance level of
9800. Next key resistances are at 9855,
9900 and 9950 levels. Key supports below 9710 are at 9655 and 9600,9500.

TECHNICALLY SPEAKING.

MACD despite being in negative zone continues with its sell signal. RSI
(36) strong suggests Bearish momentum. This week, the indices breached the
the short term average of 22EMA Nifty – 9962 .and even the medium term
average of 50 EMA Nifty 9774 and close below that.But both the indices continue
to remain above the long term average of 200dma Nifty –9003. Thus the
Trend in the short term and medium term timeframe has turned bearish, whereas
the trend in the long term timeframe continues to remain upwards.

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